States have to set house in order to meet rising power demand: Official

SECY SAID GOVT IS REVIEWING ALL THE SUGGESTIONS RECEIVED FROM STATES ON DRAFT ELECTRICITY BILL

NEW DELHI: The Electricity (amendment) Bill, 2021, through which the government intends to bring sweeping reforms in the country’s power sector, is still at a “decision stage”, Union power secretary Alok Kumar has told HT, adding that states have to set their house in order to meet India’s growing power demand.

He said government is going to include additional minimum area clauses and cross subsidies in draft Bill to avoid “cherry picking” by private distribution companies (Discoms) and generation companies (Gencos). “The power minister has also told the Parliament that there is a need for reforms. States have been consulted and it is still at a decision stage. The government has to decide on the exact provisions of the law,” Kumar told HT. The Bill was first released by the Ministry of Power for public comments on April 17, 2020.

On December 16, 2021, the government said it would drop at least four major clauses from the draft bill based on objections from stakeholders, including the farmers, state-owned distribution companies and power utility staff associations.

The Centre dropped the clause of direct benefit transfer (DBT) on power subsidies from the proposed bill besides doing away with the provision for creating a new ‘Electricity Contract Enforcement Authority’ that was supposed to adjudicate on contracts among others.

The DBT clause saw a lot of criticism from the farmers who are given subsidies on electricity by many state governments. But despite these changes to the draft Bill, there remain several other provisions which the government is currently reviewing.

Kumar said the government is still reviewing all the suggestions and objections received by various states and adding necessary clauses to provide a level playing field for private as well as government discoms and gencos.

“States have suggested that cherry picking should be avoided. Cherry picking means if you open up a private sector, they will only pick up or put terms for the big consumers. The states have asked not to allow cherry picking as all the loss making areas will be left to the government companies. But, we are addressing this by adding minimum area clauses and through cross subsidy,” he said.